Jemuel Joseph On Raising $70 Million To Automate Home Building For Maximum Cost Efficiency And Value

In the realm of entrepreneurship, there are tales of resilience, innovation, and the relentless pursuit of turning dreams into reality. Jemuel Joseph’s journey embodies all these elements and more, from his humble beginnings in Ethiopia to co-founding Cover, a revolutionary company reshaping the future of housing.

In an exclusive interview, Jemuel shared insights into his upbringing, the challenges he faced, and the remarkable evolution of Cover. He also talks about the challenges he faced with acquiring funding for his company and the rejections he faced. Cover has attracted funding from top-tier investors like General Catalyst, Khosla Venture, Bill Peck, and Bruce Richards.

In this episode, you will learn:

• From Ethiopia to Silicon Valley, Jemuel Joseph’s journey embodies resilience and innovation in pursuit of the American Dream.
• Cover’s inception stemmed from a shared vision to revolutionize home construction through mass production, customization, and streamlined operations.
• Overcoming obstacles in the venture capital landscape, Cover attracted visionary investors who recognized its transformative potential.
• Strategic problem-solving guided Cover through unexpected challenges, emphasizing understanding root causes and collaboration for effective solutions.
• Cover’s future vision extends beyond home construction, aiming to build communities and cities by empowering individuals worldwide.
• Dynamic relationships with investors fuel Cover’s growth, leveraging expertise and networks to drive innovation and scalability.
• Jemuel Joseph’s story inspires aspiring entrepreneurs, highlighting the importance of perseverance, creativity, and unwavering commitment to making a difference.

 

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About Jemuel Joseph:

Jemuel Joseph, based in Los Angeles, CA, US, is currently a co-founder and president of Cover Technologies Inc. He holds a Bachelor of Architecture (B.Arch) from Pratt Institute.

With a robust skill set that includes Python, Digital Fabrication, CSS, Git, Rhino 3d, and more, Jemuel Joseph contributes valuable insights to the industry.

Connect with Jemuel Joseph:

• LinkedIn
• Crunchbase
• RocketReach
• TheOrg

Read the Full Transcription of the Interview:

Alejandro Cremades: All right? Hello everyone and welcome to the deal maker show. So today today we have an amazing guest that is going to be joining us. We’re gonna be talking about a a bunch of stuff. You know we’re gonna be talking about. Financings you know getting a ton of rejections. You know, really coming out on top. You know on several financings that our guest has done you know building a rocket ship that he’s in but really remarkable journey you know coming to to the Us. Obviously as an immigrant you know, incredible story I mean I’m also on immigrant. So I love those stories. But again all the good stuff like building scaling financing that we like to hear so without fartherdo. Let’s welcome our guests today Jim well Joseph welcome to the show. So originally born and raised in Ethiopia how was life growing up, give us some I walk through memory lane.

Jemuel Joseph: Um, yeah, thanks for having me.

Jemuel Joseph: Yeah, it was. It was really different than than I think the childhood experience that that one would have here. Um, you know spent a lot of time outside ah sort of just being creative and in nature. Um, and. You know there was a moment in time where I started ah realizing that technology was taking off that was sort of at the two thousand s and ah, what I would say is it felt like um technology was coming to Ethiopia slower I remember ah you know being as a kid wondering why dial up. Ah, was so slow and internet bandwidth ah wasn’t really what I thought it should be but at the same time it gave me enough exposure to be curious about what was going on in the rest of the world especially through things like Tv and reading books and such like that. Um, and so. It was sort of a mixed balance of of of both. You know, having just just that that great childhood experience not having to to be too exposed to technology but at the same time having an awareness of what was going on.

Alejandro Cremades: So Your parents ended up a deciding to come here to the us and you know you came here to the Us you did your high school college. All of the studies but coming here to the Us I mean I’m sure that for you was a quite a shift now I mean new friends New life. How was that How how do you think that shape you yeah.

Jemuel Joseph: Yeah, you know? Fortunately, for me, um, there wasn’t a language barrier coming ah coming to the us I had spoken english and had gone to british school in Ethiopia and so that part was much easier, but what was striking was I was exposed. Ah, to to a much broader ah sort of set of of things particularly the internet. Um as I mentioned earlier you know the internet speeds weren’t particularly great in ethiopian so when I moved here that was the most fascinating thing for me to have all of this knowledge. And all of this opportunity sort of at my fingertips. Um, and you know in high school I think I was I was struck by ah, just the differences in in kind of the the high school experience. Um, definitely kind of what I saw in movies. Was was was ah was was sort of real here. Ah, but but really the thing that that struck me the most as being different was just how much access I had to knowledge and information and and and the internet.

Alejandro Cremades: So then so then for these two I mean how was it like to like see your parents you know going after like like the American dream. You know obviously coming here to a new country to like seeing them working hard for a better future for you guys I’m sure that was also very inspiring for you. Okay.

Jemuel Joseph: Yeah, it was it was you know my parents worked for the un in Ethiopia which which was the african headquarters and so they relocated to to work at the New York at the New York Headquarters and it was very inspiring because. Ah, they sort of took a leap of faith thought that there’d be a better education and a better path for me to continue growing. You know my life ultimately and I think they were they were absolutely right in that but you know at the time it wasn’t so certain they didn’t know you know. How great the the public education system would be um how I would assimilate whether I would transition and and and start a new life life here. Um, and so there there there were a couple unknowns. But fortunately I think it it worked out. Well.

Alejandro Cremades: So then in your case you ended up going into architecture. So how that that creativeness in you sparked up, you know why architecture out of all things.

Jemuel Joseph: Yeah I think I think ah for me, it actually was a pretty last-minute decision towards the end of high school. Um, you know from a very young young age I’ve been interested in technology and was building websites. Even even when I was in Ethiopia and so when I started to think about. What I wanted to do professionally at the time software engineering sort of in the zero six zero seven um wasn’t really as present or I wasn’t as exposed to it and so I picked a career that would in some sense give me maximum optionality something that involved design something that had. Technical aspects to it. But most importantly, ah, you know was a professional industry ah with with sort of a clear path and so that’s how I ended up in architecture but to my surprise there was a lot of interesting work happening and overlap between my core interests. Ah, which were you know building things in computers virtually and and what was happening ah in in in sort of my professional career path architecture.

Alejandro Cremades: So You met your cofounder during this time you know so it was a pibodal going into into studying architecture. So So how was that you know that journey for you guys to meet up. To start to discuss and to brainstorm about a future a future where you could bring something of your own you know to a problem that you were encountering you know which ended up becoming cover but but how did it get there to really see cover in a tangible way like hey you know it’s time to to launch this thing.

Jemuel Joseph: Yeah, the way the way you know we sort of got to cover is actually very natural. Um, you know as we went through ah school I started to realize that the pace of architecture wasn’t. Ah, even close to the pace of technology and and what I mean by that is you know as a 20 year old thinking about what I wanted to do ah in the next ten years I noticed that there were engineers pushing code ah to millions of people and ah raising all of this capital to make ah their vision a reality and. What I saw in architecture was was a stark contrast where I saw people graduating and and spending you know the next two decades ah working through the corporate ladder and not really having the agency and autonomy and so I had the sense that that wasn’t really what I wanted to do. And was paying a lot of attention to what was going on in venture particularly at the time y combinator and and these companies like stripe and airbnb and dropbox taking off he at the time was sort of exploring a similar thing but in a different dimension. Ah, he was wondering why there wasn’t high quality housing. Still abundant. Ah, and ah he actually had went and worked for you know these really high-end architecture firms ah realized that the material costs weren’t ah necessarily the limiting factor ah in in in these projects.

Jemuel Joseph: Ah, and he noticed that there was a lot of coordination that is like all of these consultants working to build these 1 ne-off you know Ah very very expensive homes and had this you know question which was well if if you just you know had a product you designed and built over and over again. You could eliminate a lot of those coordination costs and and probably make housing much cheaper and and and in fact, he went and worked for prefap company over the summer and so we were really sharing our observations. Ah me ah, really about the pace of of. Of progress and and technology and him around sort of these core issues that he was identifying. There were limiting architecture and construction to progress and in those conversations we came to a conclusion that there were ah probably 3 things that hadn’t been tried before together. That if they were tried together would have the best chance at at at ah you know, ah offering high quality housing at at scale and so those those ah those 3 things became the basis of cover and we realized that nobody was doing it and nobody would do it unless. Ah, we gave it a shot and and that’s how we started the business.

Alejandro Cremades: So then for the people that are listening to get it. What ended up being the business model of cover. How do you guys make money.

Jemuel Joseph: Yeah, so um, ultimately we we build homes for people. Um, and so instead of going to a general contractor. Ah that builds homes conventionally. Ah, you’d come to us and and and receive effectively the equivalent thing which is a home but we do it very differently in that. Underlying how? ah we get you a home. There are three basic ideas. The first is that we want to build homes like cars and and what that means is we want to redesign and Reengineer the product. Ah for mass production at scale. And so in the future. Our factories will look very much like car factories where you know there’s ah you know potentially automation and assembly line and what comes out are these ah panels and components that can be rapidly assembled into various layouts. Which is a second idea which is that we actually let homeowners customize the layouts and so even though you’re getting your home built in a factory There’s still the ability to configure. Ah the layouts and the finishes and the options that come in your home which historically hasn’t been the case. Ah, you know if you think about Sears home ah or other prefab ah companies in the past they what they do is they’d offer you a catalog of options and you’d have to pick one of 16 layouts and so we actually changed that. Ah, the final thing is ah we.

Jemuel Joseph: Are vertically integrated and we streamline the entire process and so ah, you know in a typical kind of architecture firm what you’d have is you’d have people. Ah you know managing every element of the process such as drawing. You know the plans and permitting them and then. Managing you know, ah the construction drawings and there’s all of this documentation. Um and sort of operational processes that drive up the cost of building a home and to solve that we build ah software internally and so you know for example today. For any project we have even though it’s a custom layout project. We’re able to automatically generate permit sets instantaneously do the structural calculations instantaneously and we believe that that ah not only ah you know lowers the costs ah to to to our customers. Ah, because they don’t have to pay for for that overhead. But it also just improves their experience because of ah how how much shorter the timelines get um, so yeah, you know build homes like cars ah custom homes ah by using panels that can be reconfigured and then software to streamline. Ah, sort of the backend processes that traditionally you’d you’d need to hire many many people for.

Alejandro Cremades: So then I know that in this case, you guys had the Y C fellowship you know, white Communator fellowship. How is this different from let’s say like doing the accelerator program.

Jemuel Joseph: Yeah, so ah, you know when we ah were leaving college. We applied to to Yc core which is a program most people are aware of and they interviewed us for that but we weren’t quite a fit because well we we hadn’t built a home or proven anything. And at the time they’re running the smaller program which was meant to resemble what they originally ran when they were you know running the program out of Massachusetts which is that they’d give entrepreneurs $20000 instead of I think at the time one hundred Twenty thousand dollars for 7% and they’d let you build over the summer ah they’d have you meet with partners and then they’d give you access of course to the network and a demo day and so ah, you know we we had. We didn’t we didn’t get into core but we did get $20000 to move to the West Coast ah it was 4 of us at the time and and we used that money to live in a house and and build our first kind of cover concept in the parking lot.

Alejandro Cremades: So for for for these guys. I mean you you actually went through the ringer when it comes to raising money. You know as a whole obviously that was the starting point you know with the ycfellowship you know to to get outside money. Ah, but it has been a journey. I mean all in all how much capital have you guys raised today for cover so it has been quite the trip to raise that and obviously you did your seed and then you did the series a and and and so forth, but it hasn’t been easy. So.

Jemuel Joseph: We’ve raised about $70000000

Alejandro Cremades: Walk us through how has that journey been of raising money.

Jemuel Joseph: Yeah, so we had actually tried to raise money when we were still in New York City in college and um, what we noticed pretty quickly is that the the venture community at the time on the East Coast wasn’t really investing in in hardware or hard tech. Um, rather they’re investing in software or consumer or things like that and so you know we had a sense that well if we’re going to raise capital it’s going to be ah in the bay area and and sure enough it was we raised the $20000 ah, but even then. Um, there weren’t a lot of venture capital ah firms. You know, investing in in housing startups or hardware. It was perceived as ah, you know, really risky because of how capital intensive these businesses were and and so. What ended up happening for us just over time is that we you know had to convince a small set of investors that really got the opportunity and the potential of of solving this important problem but we had to prove things at a much smaller kind of scale. Um, and so you know with the $20000 we built our first prototype and so people could actually touch the product and understand what it would look like and feel like and from there. Ah we were able to raise our seed round from a couple of really amazing investors Niko Bonazos a general catalyst.

Jemuel Joseph: And Vinote Kosla actually himself at Kosla ventures um and these were people that understood right? The ultimate potential of an importance of solving this problem but we didn’t you know, raise $10000000 and so we had to take that 1.6 and actually sell to our first customers and show that we could deliver it and show that this thing could be installed and that the quality was great. Ah, and ah, you know and from there it kept on going and so um, it’s been a sequential sort of pattern of. Finding investors that believe in ah, not necessarily the short-term kind of outlook. Ah, ah because this is hardware. It takes longer to scale but believed in the importance of solving this problem and would give us capital to get. To the next stage of proving the technology and and finding customers.

Alejandro Cremades: And I know there was quite a story there on the serious B as well. You know that involve weekends and stuff like that. So so what happened.

Jemuel Joseph: Yeah that’s right? and so you know even though we had proven things right? We had raised the series a from founders fund and ah laar who who’s the second largest at the time was the second largest home builder. Um, there was still a lot of hesitation about investing in our series. B. And so you know we had been pitching ah just constantly my cofounder was traveling to the bay and back. Ah and ah you know tar’s surprise on on one of those weekends that we hadn’t expected an investor said ah you know that they were in la on Sunday and so they texted us Sunday morning. Ah, saying you can you know? can you meet and you know coincidentally that was a week and both myself and my co-founder were taking to spend time you know with our partners and so you know there’s a decision point around. Well you know do we do? We kind of prioritize our existing plans or do we ah, just. Ah, you know run over to meet these investors and both him and I met those investors at our showroom in La and we spent 5 hours talking about the business ah with with these investors and. Ah, the week after we we had a lead term sheet.

Alejandro Cremades: That’s humble. You now is he you know with Investors vision is a really big one. So if you were to go to sleep tonight and you wake up in a world general where the vision of cover is fully realized what does that world look like.

Jemuel Joseph: Um, death.

Jemuel Joseph: Yeah, yeah, so the ultimate vision of cover is that we we want to build communities and and and even cities and our belief is at the core of that. Ah, we need a faster way to build and a simpler way to build and so in the future. Anybody ah, you know in the us and in the world should be able to come online. Ah and design a home ah or understand what’s buildable on their property and if they don’t have a property be able to find a property um and receive a few things which you still can’t today which is. Ah, fixed price for your home a timeline knowing when you’ll actually be able to to move in and certainty around the quality of what you’re going to get and ah once you know you like. The home and and and and you’re committed to building with us. We take care of everything um all the way from you know the the the manufacturing the permitting the installation. ah and ah you know in in four to eight months um anybody should be moving into their home and just simply bringing their furniture furniture in and so that’s that’s really the the ultimate vision and um, the 1 thing I also want to point out is you know we make we make panels that come together.

Jemuel Joseph: Ah, in in ah in in currently single family and and and a to use small backyard homes but that doesn’t mean that these panels can’t be assembled also into different types of homes some of which ah we know of like multifamily um, but also potentially. Types of living that haven’t even been invented before and so that’s something we’re really excited about diving into once once we once we solve the the the manufacturing problem is you know what? what kinds of living experiences. Can we can we begin to offer. Ah. At a larger scale at a community scale at a city scale and that’s something that that we’ll be able to tackle that.

Alejandro Cremades: So Obviously you know like you have amazing investors to that you’ve been able to rally so how do you go about? you know, like dynamics you know with investors you know you see you have like really big logos. Really big people there you know that are. Are part of the of the team Now. No and especially part of the Board. So How do you go about? really you know, making sure that there’s good dynamics at a board level and also making sure that you’re able to use and leverage as much as possible the network and the value that they’re bringing to the table.

Jemuel Joseph: Yeah, you know for us, we’ve been really fortunate to to to have investors that have seen this ah kind of problem be solved um, a lot of our investors were early investors in Tesla and spacex and have followed the journey from the very first institutional round to. Ah, even now some of our investors are actually currently on the board or were recently on the board of Tesla and spacex and what that means is that they get the challenges at the core and there’s that fundamental alignment about you know what we need to solve and how much time it takes. Ah, and the sort of support we’ll need from them along that journey and that’s made it really? um, a great working relationship is is what I’d say and we wouldn’t have been able to get that if we weren’t able to be selective. And able to reach ultimately these these group of investors and so yeah, the dynamics. Great.

Alejandro Cremades: So in your case I mean you know imagine now that they let’s say because we’re talking about the the future now but I want to talk about the you know earlier I want to talk about past but talk about past also with a lin of reflection. You know if I was to put you you know into a time machine. And I put you back in time you know maybe to that moment that you guys were thinking about perhaps bringing something of your own because I mean you guys have been for almost a decade you know, pushing cover which is like in in corporate years I mean it’s like it’s like 100 years right so so obviously if you could go back in time you know maybe to 2014 where you guys are about to launch cover. You know, right? right? before you were even thinking about it and let’s say you were able to have a sit down with your younger self and then also with your cofounder and you were able to give your younger selves one piece of advice before launching a business. What would that be and why given what you know now Jim walls.

Jemuel Joseph: yeah yeah I think the feedback we’d give ourselves is to always go and solve the real problem. Um, oftentimes it appears that they’re you know, maybe a dozen problems in front of you. But what we found is that for us progress has been ah, sort of most noticeable when we understand what is actually like constraining us what don’t we understand about the problem whether it is about you know building faster whether it is about making customers happier or finding customers. Ah, and ah, it’s really easy and and in in our past. Ah there have been moments where ah we’ve we’ve sort of sort of not focused in our our our entire company on just solving the a problems I guess ah as we call them internally. And so you know there are these a problems and b problems b problems being the simpler um sort of more superficial. Maybe more comforting problems to solve and then there are the a problems which are you know Ah hey well, how do we How do we? How do we? Ah you know. Wrangle our supply chain because that’s affecting you know our timelines and we want to build more and we need to go solve that we need to go talk to our vendors. We need to go rebuild aspects of the supply chain and so um I think.

Jemuel Joseph: As you have more capital it. It’s at the same time easier to solve a problems because you have resources but at the same time. Um, it can it can take you away from the a problems because now you can spend more across a variety of areas and so. I Think that’s been a big kind of learning process for us.

Alejandro Cremades: So then so then in this case too. I mean when you go about problem solving right? Let’s say like you have like ah let’s say like massive obstacle in front of you something like completely unexpected crazy event I mean what is that what is that thought process or that. Or that journey of really solving it. How do you go about it.

Jemuel Joseph: Yeah, the the media thing is is to to to not attempt to solve it like right away, you need to take a step back and get into the room with the right people and actually understand what’s going on a lot of these. Larger problems as you’d say are actually ah you know not caused by a single thing right? It’s often something that causes it but you need to actually go root cause what’s causing in multiple layers in and interestingly 99% of them. Ah. Have been fairly simple things to resolve meaning. Ah, it’s It’s a few things that cause ah larger sort of observable issues and we’ve gotten really good at ah, just just being able to root cause and and to take a step back and get into the with the right people. To to understand what’s happening.

Alejandro Cremades: So I guess for the people that are listening Jim well that they will love to reach out and say hi. You know that are really inspired by the conversation. What is the best way for them to to do so.

Jemuel Joseph: Yeah, shoot shoot shoot us an email. Ah actually read all of the inbound emails at hello at buildcover.com and also feel free to connect with me on ah on Linkedin.

Alejandro Cremades: Amazing. Well Jim well thank you so much for being on the deal maker show today. It has been an absolute honor to have you with us.

Jemuel Joseph: Thanks for having me.

*****

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